Reassessment of home copying rates: research on damage per consumption.

Consumers are permitted to make a copy of copyright-protected and related-rights-protected works (from a legal source) for their own practice, study and use. This is known as a private copy and is provided for in the Dutch Copyright Act and the Dutch Neighbouring Rights Act. Copyright holders and related rights holders are compensated for this through an indirect payment: the private copying levy. This concerns copyright and related rights holders for all types of audio works, audiovisual works, written works and visual works. The levies are paid when purchasing storage media, and are collected and distributed by Stichting de Thuiskopie. The amount of the levies is determined by the Stichting Onderhandelingen Thuiskopie (SONT). The amount of the private copying levy must be ‘fair’ and relate to the damage suffered by rights holders as a result of private copying. Commissioned by SONT, Dialogic conducted research into this damage, with a view to revising the rates. The research is based on the premise that the damage caused by private copies can be determined using the following formula:

Damage from private copies = number of private copies made per year x damage per consumption x consumption factor

This research focuses on mapping the factor damage per consumption, elaborated as the net marginal revenue for rights holders from licensed consumption. Within this framework, two approaches were distinguished:

1. The substitution model – also referred to as loss of demand. This model considers the extent to which consumers would have purchased licensed copies had they not made a private copy.
2. The licensing model – in which each private copy is regarded as a form of value. The streaming model falls within this category.

In addition, four types of works were considered, discussing the exploitation models, applicability and net marginal revenues for rights holders:

• Audio works
• Audiovisual works
• Books and written works
• Images

For various types of works, there is a wide range in the estimates of net marginal revenue. This applies, among other things, to other information from publications, podcasts, radio programmes, music videos and online videos. Due to the complexity of exploiting images, it was not possible to determine a net marginal revenue per consumption for rights holders. However, the research report provides an extensive elaboration of relevant benchmarks and estimates for specific types of works, with the necessary context. Visit the SONT website for further information about the private copying levy and our research.